Pakistan’s expenditure planning continues to show persistent forecasting gaps, with debt servicing and subsidies repeatedly exceeding budgeted amounts over the FY21–FY25 period, according to a budget scorecard analysis.

Debt servicing emerged as the most significant pressure point. From FY23 onward, actual debt-related payments consistently came in above the original budget estimates, highlighting ongoing difficulties in accurately projecting borrowing costs at the time of budget preparation.

Subsidy expenditures followed a similar pattern, with actual spending surpassing allocations in most years, often by wide margins. In contrast, spending under the Federal Public Sector Development Programme (PSDP) repeatedly fell short of targets across all five years, indicating a consistent trend of underutilisation of development funds.

The report points to a structural divide in budget execution. Mandatory and formula-driven expenditures such as defence, pensions and intergovernmental transfers generally stayed closer to projections, while areas influenced by policy choices, price shocks and implementation delays showed much larger deviations.

The findings suggest that Pakistan’s expenditure forecasts remain most fragile in high-impact fiscal categories, particularly debt servicing and subsidies, where repeated misses continue to strain overall budget reliability.